Updated: November 5, 2024
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Medical payments coverage is an auto insurance add-on that pays for injuries resulting from any vehicular accident. Also known as MedPay, this can pay for your medical bills whether you’re a driver, passenger or pedestrian. It also covers injuries of your passengers.
Medical payments coverage applies regardless of who is at fault. Understanding how it works can help you determine if you should get this optional add-on for your auto insurance policy.
Key Findings:
Medical payments — or MedPay coverage — can help you with your medical bills after an accident. Learn more about how this coverage can provide your auto insurance policy with additional benefits.
Medical payments coverage is an optional addition to your auto insurance that pays for any injuries you and your passengers suffer in an accident.
MedPay covers your medical bills as a result of any accident involving vehicles — whether you’re a driver, passenger in another car or pedestrian.
MedPay acts as supplemental insurance if you have health insurance that covers car accident injuries.
Having medical payments coverage is required in only three states: Maine, New Hampshire and Pennsylvania.
Why Trust MoneyGeek? MoneyGeek reviewed data from state departments of insurance as well as the Centers for Medicare & Medicaid Services, a part of the Department of Health and Human Services. We utilized data from Quadrant Information Services to analyze rate changes with the addition of MedPay, and consulted with insurance industry experts to gather insights that answer critical questions about medical payment coverage.
Medical payments coverage can financially protect you in a variety of accidents involving vehicles. If you’re a driver, passenger or pedestrian and whether you’re at-fault or not, MedPay will cover your medical payments, including doctor visits, treatments needed due to the accident and even health insurance deductibles.
If personal injury protection (PIP) coverage is required in your state, you may not need MedPay. MedPay comes with its own limitations and does not cover all costs involved in an accident. Before purchasing medical payments coverage, it’s important to evaluate whether it’s worth the extra cost.
In general, medical payments coverage pays for the treatment of any injuries sustained in any auto accident. While it helps with a variety of medical bills, it does not pay for other typical costs involved in an auto accident. Below is a list of what MedPay does and does not cover:
Covered | Not Covered | |
|---|---|---|
1. | Health insurance deductibles and copays | Lost wages |
2. | Doctor and hospital visits or stays | Replacement services (childcare expenses, etc.) |
3. | Surgeries or dental procedures needed as a result of the accident | Medical treatment not related to the accident |
4. | Prosthetic devices | Injuries sustained by the other party |
5. | Chiropractic services | Legal expenses |
6. | Funeral expenses | Property damage |
7. | Ambulance fees | Survivor’s loss |
The way to claim a payout from your medical payments coverage will depend on your insurer, as it depends on whether they consider it as primary or secondary coverage and whether you live in a no-fault state.
MedPay, personal injury protection (PIP) coverage and bodily injury coverage are three types of coverages that are often confused with one another. Understanding the difference between the three can ensure you get the coverage you need.
While both medical payments coverage and PIP coverage pay for physical injuries that you sustain in an accident, regardless of who is at fault, PIP coverage is more comprehensive. In addition to medical care, it also covers lost wages, essential services like childcare, and survivors’ loss — none of which are included in medical payments coverage. MedPay also has lower liability limits than PIP coverage, as it is meant only to supplement other coverages in your policy.
In contrast, bodily injury coverage only covers third parties involved in an auto accident where you are at fault. This means that if you get into or cause an accident, your bodily injury coverage is responsible for paying for any third-party medical bills. None of your own injuries will be covered by bodily injury coverage.
Between the three coverages, only bodily injury is required in almost every state. PIP coverage is mandatory in states that require no-fault insurance but is optional in others, while MedPay is optional in all but a few states.
With national health spending projected to grow at an average rate of 5.4% per year. Having MedPay helps protect you from rising healthcare costs because it closes the gap and covers services that some health insurance policies may not. If you don’t live in a no-fault state, have PIP coverage or health insurance that covers injuries after an accident, MedPay might be worth considering.
Medical payments coverage can kick in in a variety of situations and help you save on a number of medical costs. MedPay can cover you when:
MedPay is an optional add-on in almost every state and is only required in three states: Maine, New Hampshire and Pennsylvania. Maine requires at least $2,000 in MedPay coverage, New Hampshire requires at least $1,000 in coverage and Pennsylvania requires a minimum of $5,000 in coverage.
Examining how medical payments coverage works in real life and when it's applicable can help you determine if this coverage is right for you.
Let's say you get into a vehicular accident and have no health insurance or personal injury protection coverage to pay for your medical bills. In this case, your MedPay coverage would kick in and help pay for immediate medical or funeral expenses. This coverage applies regardless of who is at fault and whether you’re a driver, passenger or pedestrian.
If you do have health insurance, MedPay will pay for your deductible and copay.
If you live in a no-fault state and have low PIP coverage limits, MedPay could act as your secondary coverage and supplement your PIP coverage where it's lacking. For instance, if you have a $10,000 PIP coverage limit, but your medical bills hit $15,000, MedPay will cover the gap.
However, MedPay coverage limits are typically low and are only likely to cover a limited amount of your medical bills. It will also not cover any lost wages, so if you’re unable to work, MedPay will not compensate you.
Adding MedPay to your policy will cost, on average, an additional $5 for a limit of $2,000. However, limits can be anywhere from $1,000 up to $25,000, depending on the insurer. Keep in mind that your premium cost will also depend on a number of factors unique to you, such as your age, location, gender and more.
MoneyGeek gathered quotes from three different insurers in various states for a 40-year-old male with a clean driving record and a 2010 Toyota Camry LE. The policy included 100/300/100 in liability limits and comprehensive and collision coverage with a $1,000 deductible. Policies with MedPay had a $2,000 limit.
Allstate (Texas) | Progressive (California) | Nationwide (Nevada) | ||
|---|---|---|---|---|
1. | No Medical Payments | $50 per month | $97 per month | $127 per month |
2. | Medical Payments | $53 per month | $104 per month | $132 per month |
3. | % Increase Due to MedPay Payments | 6% | 7% | 4% |
Note that these rates are simply averages and can change based on your unique circumstance. To find the cheapest auto insurance rates for you, make sure to compare auto insurance quotes from at least three different providers.
Understanding how medical payments coverage can benefit you can be difficult. Below are a few frequently asked questions to help you understand MedPay coverage better so you can determine if it’s right for your needs.
Medical payments coverage, or MedPay, is used to pay for any medical costs you incur after being involved in an auto accident. It can pay for costs that your typical health insurance may not cover, such as chiropractic care and ambulance fees.
Personal injury protection (PIP) coverage is more comprehensive than MedPay. While both policies pay for medical costs, PIP has higher limits and covers expenses that MedPay doesn’t, such as lost wages and essential replacement services, like childcare.
Like with any policy or coverage, the amount of MedPay coverage that’s best for you depends on your financial capacity and needs. Examine your current health insurance and personal injury protection coverage, if any, and determine if MedPay could help you close gaps in coverage in the event of an accident.
MedPay coverage is designed to serve as a supplement to your health insurance. While it is not necessary, it can serve as a way to grant you extra financial protection in case your health insurance limit is reached.
Liability coverage, which consists of bodily injury and property damage coverage, only pays for third-party injuries and damages. Medical payments coverage helps with your medical bills and the medical bills of any of your car’s passengers in case of an auto accident.
Medical payments coverage is just one of many different types of coverage you can include in your auto insurance policy. Learn more about auto insurance to determine the coverages that are best for your needs.
About Nathan Paulus
Nathan Paulus is the Head of Content Marketing at MoneyGeek, with nearly 10 years of experience researching and creating content related to personal finance and financial literacy.
Paulus has a bachelor's degree in English from the University of St. Thomas, Houston. He enjoys helping people from all walks of life build stronger financial foundations.
